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Why retargeting is an integral part of your holiday season marketing mix

Consumers' online shopping behaviour changes during the holiday season. While appearing more indecisive they are actually significantly more determined.

However they need more confirmation, and a gentle nudge that a well-designed retargeting campaign can provide.

The holiday season is upon us. It has probably been for a while if you’re a retailer, bricks and mortar or online. Your holiday season campaigns are probably fairly instrumental in meeting this year’s sales budget.

So I figured I’d share some basic insights into shopper behavior during the holiday season and why the online retailers having seen this data are making retargeting an essential part of their holiday marketing mix.

Boxing Day 2011 was the busiest ever in UK online shopping, seeing an increase in online retail traffic of 18%. December sales went up 30% compared to the same period of 2010.

Figures for the US showed the same trend as online retail sales for November and December rose by 15% compared to the previous year. A stark contrast to the bricks and mortar sales that saw a meagre 4% increase.

So at the macro level, it is pretty obvious that there is money to be made. But for the individual online marketer it can be difficult to translate the insights behind those stats into action. One thing is to make sure you’re spending enough to capture a fair share of voice online – but the decisions on where to spend is what really matter.

So the basic recommendation is to make sure you are making the right decisions about your holiday season campaigns.

We’ve looked into the data of a couple of our clients to give you a few data-driven pointers.

Fact #2: Repeat traffic increases

One online fashion retailer saw their traffic increase by 27% from November 2011 to December 2011. Not surprisingly. More interestingly they saw that number of new visits remained roughly the same (down by 3%) – meaning that the increase in traffic was largely driven by a much higher visit frequency by the individual consumer.

Another shop experienced a similar development: traffic went up 28% but new visits were up only 5%. In other words a disproportionate increase in return traffic.

You can interpret this change in behaviour in a number of different ways. I chose to view it in the prism of the pocket-psychology surrounding my own approach to holiday shopping: I’m buying stuff for others, meaning that I feel an increased sense of responsibility for making the right choice.

When I buy stuff for myself I pursue a strategy of gratification. When I find something that is “good enough”, I buy it. When I’m buying a gift for my wife, I’m pursuing a strategy of maximisation – I want to believe that I’m making the best possible decision.

My own “good enough” is not good enough for my wife. Everyone in a relationship knows what I’m talking about. And it is fundamentally the same mechanism when shopping for your friend, mother or father-in-law. You spend a little bit more time considering options.

But at the same time, people are still lazy and suckers for convenience. So they’ll come back to sites and shops instead of exploring new options endlessly.

So – our recommendation is to make use of the fact that consumers are prone to returning. Some do it regardless of your inaction while others could do with a gentle nudge. Which is a good reason why retargeting makes even more sense during the holidays.

Fact #3: People will buy from you, or someone else

The aforementioned fashion retailer saw their conversion rate increase by 106%. Despite the fact that they had a large portion of people visit multiple times during their consideration phase.

This indicates – again somewhat unsurprisingly – that consumers are on a mission. They are not browsing just for fun. They are in a buying mode. And they have a deadline.

So while on the surface the increase in number of contacts to sell something indicates greater indecisiveness, in reality it shows that people are very determined. Once they’ve been to a given shop, there is a large likelihood that they can be made to return and buy.

Hence my second recommendation is that you consider if increasing you CPC might be worthwhile. A click from a holiday shopper is very valuable indeed. Even if she does not convert the first time around.

The ability to remind the visitors of their previous interest in a product simply becomes more effective once they have more of an incentive to get their purchases finalized.

What to make of it

The holidays are busy times for shoppers and online marketers alike. Shoppers have a long list of items to buy and marketers have a long list of tools to apply.

My recommendation is that you apply a strategy of gratification – much like my usual shopping habits. You find a tool that does the essentials, not necessarily the tool with the richest feature set.

Find something or someone who can help get you going in time for the holiday sales, not someone to help you build a proverbial space ship. Apply the old 80/20 rule: see if you can get 80% of the value with 20% of the effort.

Over the 9 months, I have noticed a trend in increasing daily traffic (along with a trend of increased purchases). I promote my sites hard using free resources, such as social media, and free site listings on shopping directories. About the ONLY thing I pay for is web-hosting, and if the indicators can predict for the coming year, my sites should all be paying for themselves.

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